Red hot Byadgi chilli stings farmers as prices fall

It’s Thursday noon at the APMC yard in Byadgi and police sub-inspector Arvind P.S. is giving instructions to police personnel about the first of the two route marches to be taken out in the market yard. A little later, the yard reverberates with the siren of the police vehicles which take the designated road of the route march. Farmers wait beside their heaps of bags of red chillis and look on anxiously.

“Don’t worry, it is a routine exercise,” Kanthesh, who works for a commission agent at the market yard, comforts an anxious farmer. The vehicles are back at the APMC office after the route march and the personnel stand guard at vantage points. The exercise is repeated after 3 p.m.

In the market spread across 78 acres in Byadgi town of Haveri district in north Karnataka, the route march is taken out twice on Mondays and Thursdays when the chilli market is open. The Byadgi variety of chilli is known the world over for its colour and unique flavour.

Memories of violence

This has been the practice since March 11, 2024, the day when the APMC (Agricultural Produce Marketing Committee) office was torched and a few vehicles, including a fire engine, were gutted, says a policeman on duty, as several others, including a few who suffered minor injuries during the violence, keep vigil. The APMC office now wears a new look after a fresh coat of paint.

At a distance, sitting under the shade and standing by the roadside, first-time visitors to the market are being told tales of the violent protest a year ago, and the subsequent arrests and losses.

Meanwhile, unmindful of the siren, Basavaraj Navale, who works for the commission agents, and trader B.M. Chatrad are busy assessing the quality of the chilli kept for auction. The likes of Basavaraj, who are scattered over the big yard, have already completed the assessment of the quality of the chilli pods and have written down the bids for each lot they assessed. Traders and commission agents Basavaraj Chatrad and Malatesh Chatrad too are busy doing the same. However, their work is limited to the lots in the open space before their office.

Nothing much seems to have changed after the violence in the Byadgi APMC yard a year ago over the sudden dip in prices of different varieties of red chillis.

In February 2024, the average price for Byadgi Kaddi, Byadgi Dabbi and Guntur varieties stood at ₹35,099, ₹38,951 and ₹13,509, respectively. On March 20, 2025, Byadgi recorded arrivals of 2,47,196 bags and the average prices for Kaddi and Dabbi varieties were ₹23,359 and ₹25,869 respectively, and the Guntur variety fetched average price of ₹12,209.
| Photo Credit:
K. MURALI KUMAR

Downward trend

What has caused concern yet again this year is the further dip in the prices, leading to sporadic protests not in Byadgi but in far-off places like Kalaburagi and Raichur, where the Guntur variety has seen much lower bids. The series of meetings officials and Minister of Textiles, Sugarcane Development and Agricultural Marketing Shivanand Patil, had with farmers and APMC merchants, don’t seem to have made any impact so far except for the increase in police bandobast. Cold storage in Byadgi promised by the Minister has not materialised as suitable land couldn’t yet be found.

In February 2024, the average prices for Byadgi Kaddi, Byadgi Dabbi and Guntur stood at ₹35,099, ₹38,951 and ₹13,509, respectively. In February 2025, the average prices for the same varieties were ₹27,009, ₹28,2098 and ₹13,900, respectively.

On March 20, 2025, Byadgi recorded arrivals of 2,47,196 bags and the average prices for Kaddi and Dabbi varieties were ₹23,359 and ₹25,869 respectively, and the Guntur variety fetched average price of ₹12,209.

Last year, Byadgi yard recorded arrivals of 68,36,363 bags recording a turnover of ₹3,187.73 crore and this year, it seems to cross last year’s arrivals. However, the turnover is less due to low prices.

Byadgi has not witnessed any protest over the prices this year but the pain is palpable on the faces of farmers who have travelled covering over 250 km carrying their produce in anticipation of a good price.

Last week, Parameshappa U. from Tangaradona in Kurnool district of Andhra Pradesh brought 50 bags of Byadgi Kaddi variety, which fetched ₹11,000 per quintal. On Thursday, he was back in Byadgi with 10 bags, but not sure about fetching the same price.  His friend from the same village, Brahmanand Reddy, was too not hopeful.

“They say there is no demand and last year’s stock is still in the cold storage,” Parameshappa said. He has been coming to Byadgi since 1996 and the highest price he got was ₹48,000 for the native Byadgi Kaddi variety three years ago. But this year, he has incurred a loss of ₹1 lakh. “The loss is more because the expenditure for seeds, fertilisers and pesticides has gone up”, he said.

Sitting on the pile of bags and waiting for the bids to be made, Mounesh Acharya from Dommur village in Ballari district is also not that optimistic. “The cost of bringing one bag of red chillis to the Byadgi market is around ₹200. The expenditure per acre is between ₹1 lakh to ₹1.5 lakh. If I get ₹12,000 per quintal that will meet the expenses”, he said.

Workers unloading chilli bags at the Byadgi APMC yard in Haveri district of Karnataka on March 20, Thursday.
| Photo Credit:
GIRISH PATTANASHETTI

Problem of plenty

Like last year, record arrivals and the problem of plenty have resulted in prices falling particularly for varieties developed by seed companies. What has added to the problems of farmers and traders is the stock of the previous two years. “Nearly 40% of the previous years’ stock has been carried over to this year and is still lying in the cold storage because of low prices,” said Basavaraj Chatrad, president of the dispute redressal committee of the APMC Merchants Association.

“Old stock is the biggest problem and what has affected the traders is that the crop they bought at a higher price and kept in cold storage, is now fetching even lesser price” said trader and commission agent Ganesh Achalkar.

Shivaraj Chatrad, who has returned to Byadgi to join his father in the trade, after his MBA in London, cites three reasons for the drop in prices. “One, the problem of old stock left with the traders. Two, the spice companies also have excess stock. And three, increased quantum of rejection in exports due to stringent test parameters introduced of late.”

Mounesh Acharya, a chilli farmer from Dommmu in Ballari district, waits for bidders to arrive at the Byadgi APMC yard in Haveri district of Karnataka on March 20, 2025.
| Photo Credit:
GIRISH PATTANASHETTI

Tougher testing parameters

Western countries have made the testing parameters stringent after traces of cancer-causing agents were found in exported consignments. While Asian countries have less strict testing parameters, they too have problem of plenty, he says.

Secretary of APMC Merchants Association, Byadgi V.S. Morigeri (Raju) believes the use of banned pesticides by farmers is the major reason for increase in the instances of rejection of export consignments.

“50% of the chillis procured in Byadgi APMC Market are exported in different forms like destemmed pods, extracted colour and Oleoresin capsicum. However, because of good stock, the companies involved are demanding high-quality pods at lower prices this year,” he said.

The problem of plenty has resulted in a loss for many traders. According to a rough estimate, the loss is said to be around ₹500 crore. Irrespective of the quantum of business they had, everyone has suffered losses, said Mr. Morigeri.

Another reason for the lesser demand for the Byadgi Dabbi and Kaddi varieties is that the high prices these varieties fetched during the previous years made the companies switch to other affordable varieties with less colour.

Is there a solution?

As of now, there seems to be no immediate solution as the arrivals continue to swell day after day with more farmers across the country getting into chilli cultivation. The price drop has already resulted in the Centre announcing market intervention steps in Andhra Pradesh.

Chief Minister of Karnataka Siddaramaiah has now written to Union Minister of Agriculture and Farmers Welfare Shivaraj Singh Chauhan for a similar step for chilli growers in Karnataka.

“I write to you with deep concern for the lakhs of red chilli farmers in Karnataka, particularly in the Kalyana Karnataka region, who are facing an unprecedented crisis due to the drastic fall in market prices,” he said in his letter.

He pointed out that the Government of India had approved the Price Deficiency Payment scheme under the Market Intervention Scheme for Red Chillies (Guntur Variety) in Andhra Pradesh, fixing the Minimum Intervention Price (MIP) at ₹ 11,781 per quintal with coverage for up to 25% of production.

“While this is a welcome step, the distress faced by Karnataka’s red chilli farmers remains unaddressed. In Karnataka, the cost of production for Guntur variety of Red Chillies (Rain fed) has been assessed at  ₹ 12,675 per quintal by the Kamataka Agricultural Price Commission,” he wrote, adding that farmers are forced to sell their produce at “distress prices.” as low as ₹ 8,300 per quintal in markets like Sindhanur.

The Chief Minister demanded an increase in MIP to ₹13,500 per quintal terming the current MIP of ₹ 11,781 per quintal as inadequate considering the rising input costs and the significantly higher cost of production in Karnataka. He also demanded expanding coverage to at least 75% of production. Former Chief Minister Basavaraj Bommai also wrote a similar letter to Mr. Chauhan soon after.

Chamaras Malipatil, Honorary President of Karnataka Raita Sangha, demanded that the government fix MIP up to ₹15,000 and above per quintal to help farmers. “We will raise this issue during Chief Minister’s future scheduled meeting,” he said.

There are other initiatives in the offing too. “The State government earmarked ₹25 crore to establish a red chilli market in 10 areas of land in Raichur and tender was floated. The work is expected to be completed by the end of December 2025. Farmers can sell the product at the same price as in the Bydagi and Guntur markets. They can save transportation and vehicle halting charges and other labour expenditure,“ says Adappa, additional Director, APMC Raichur.

Long-term solution

But Morigeri believes that in the long run, only a reduction in arrivals and shifting to other crops, resulting in quality yield may see an increase rise in the prices in the coming years.

(With inputs from Ravikumar Naraboli in Yadgir)